Born in the Gabresh, Macedonian,[5][6] Stavro immigrated to Toronto with his family when he was seven years old to join his father, who had come to Canada in 1927. He attended Duke of Connaught Public School, where he was given the name Steve, and Riverdale Collegiate Institute. He worked in his father's grocery store, Louis Meat Market, at Queen Street and Coxwell Avenue and left school after Grade 10 to work full-time.

In 1951, he and his family opened a new store across the street under the Knob Hill Farms name. Stavro said he took the name off a box of produce from California, although Knob Hill was also the name of a community in Scarborough, Ontario. By 1954, he was running his own grocery store at 425 Danforth Avenue while his older brother, Chris Stavro, managed the original store. By the late 1950s, Stavro was operating nine grocery stores and outdoor markets in Toronto. His father was diagnosed with cancer in 1956 and died in 1960.

In December 1963, Stavro opened his first food "terminal"—a forerunner of the big-box store—which featured low prices and no-frills service. It was located at Woodbine Road and Highway 7 in Markham, Ontario. Eight years later, he opened a second terminal in Pickering, Ontario. A 10,000 square-metre store at Landsowne Avenue and Dundas Street West in Toronto opened in 1975. Through the years, he opened nine terminals in the Greater Toronto Area and a 31,500 square-metre outlet in Cambridge, Ontario, which opened in 1991, billed as the world's largest grocery store.

In 1966 Stavro helped form the United Soccer Association and entered a team called Toronto City in the new league. The USA originally intended to launch its league in the spring of 1968, but a rival league, the National Professional Soccer League, announced it was ready to launch in 1967. Not wanting to lose ground to its rival, the USA decided to fast track its launch. Without any players of its own, it opted to import whole teams from Europe and South America, which would represent the franchises during the inaugural season, giving them time to build their own squads for the following season. Toronto City was represented by Hibernian of the Scottish Football League.[7] In December 1967 the USA and the NPSL merged to form the North American Soccer League.[8][9] As a result of this merger some of the USA franchises, including Toronto City folded, in part to avoid cities having more than one club in the new league with City losing out to its NPSL rival Toronto Falcons. Stavro sold his team back to the league for $160,000.[10][11]

Steve Stavro became a racehorse owner in 1965, buying three yearlings in partnership with lawyer Joe Kane. Kane got out of the business, and Stavro continued racing and breeding and as the owner of Knob Hill Stable based in Newmarket, Ontario, enjoyed considerable success. He usually named his horses after famous Macedonian heroes and battles.[12]

In 1988, Stavros acquired a 300-acre (1.2 km2) farm in Kentucky and was used to train his horses during the winter.

A long-time friend of Toronto Maple Leafs owner Harold Ballard, Stavro had served as a director of Maple Leaf Gardens since 1981, and he, Don Giffin, and Don Crump served as the executors of the Ballard estate following the latter's death. Stavro became Chairman of the Board of Maple Leaf Gardens and governor of the Maple Leafs in October 1991 following Ballard's death. That year, Stavro paid off a $20 million loan that had been made to Ballard in 1980 by Molson, who also owned the Leafs' bitter rivals, the Montreal Canadiens. In return, he was given an option to buy Maple Leaf Gardens shares from Ballard's estate. Molson also agreed to sell its stake in Maple Leaf Gardens Ltd. to Stavro. That deal closed in 1994, and shortly after Stavro bought Ballard's shares from the estate for $34 a share or $75 million.[13] The purchase was the subject of a securities commission review and a lawsuit from Ballard's son Bill, but the deal stood.

In contrast to Ballard, Stavro was a somewhat reclusive man who hated the spotlight, and largely left the Maple Leafs in the hands of the hockey operations staff. The first period of success was led by general managerCliff Fletcher. In 1992–93, the Maple Leafs had their first winning season in 14 years, coming within one game of the Stanley Cup Finals, and again made the Conference Finals the following season. During the tenure of head coach and general manager Pat Quinn from 1999 to 2002, the team was an annual contender, clinching a Northeast Division title, the first two 100-point seasons in franchise history, and two Eastern Conference Finals appearances. However, Stavro's legacy was somewhat tainted when he vetoed the Fletcher deal for Wayne Gretzky. Said Gretzky, "Toronto was my first choice. It was really where I wanted to go. But Cliff came back and said he had taken it to the owner, and the owner nixed it."

Maple Leaf Gardens, Limited was renamed Maple Leaf Sports and Entertainment in 1996, with the acquisition of the Toronto Raptors of the National Basketball Association after establishing a partnership with Larry Tanenbaum. The partnership enabled the Leafs and Raptors to share the new Air Canada Centre rather than building two separate venues. However, Stavro and Tanenbaum were said to have a poor relationship, as Tanenbaum disputed a report that claimed that Stavro saw him as a favored son. A Globe and Mail Report on Business magazine article also alleged that Stavro would worry about minute details such as hot dogs. The owners' lounge at the Air Canada Centre was modeled in a Scottish theme with dark wood panels while Stavro was chairman; his successor Tanenbaum had the room remodeled to a white modernistic style with some insiders saying that the change was made because the old room reminded him too much of Stavro.

Recently, ESPN published an article concerning Stavro that may have showed his true self. The article said, "Then somebody started hollering down from one of the luxury boxes. Steve Stavro, the grocery magnate and owner of the Leafs, was waving his arms, yelling for those lowly workers to get out of his precious platinums and onto the concrete steps. The electricians and pipe fitters scrambled to their harder perches, and even now, all these years later, I can still see the hurt on their faces".

Stavro was also known in the local Macedonian community to have a friendly competition with fellow self identified "Macedonian" Mike Ilitch who owned a rival NHL hockey team, the Detroit Red Wings. Stavro's Knob Hill Farms sponsored a hockey team in the Metro Junior A League in the 1962–63 season. The team and the league folded after the end of the season.

Stavro stepped down as Chairman of MLSE in 2003 in favour of Tanenbaum, as part of a restructuring plan that also saw him sell his majority stake to the Ontario Teachers' Pension Plan. Jim Leech, OTTP Senior Vice President of Private Equity (also known as the Teachers' Merchant Bank), had orchestrated the deal after the closure of Stavro's Knob Hill Farms grocery chain, giving rise to rumours that the financial state of MLSE could also be affected. Stavro received a luxury box as part of the deal, which caused some controversy as several disabled season-ticket holders were displaced without notification.

Stavro was a founding sponsor of Canada's Sports Hall of Fame and a member of its advisory council, founding member of the Canadian Federation of Independent Grocers, corporate member of 4-H Canada, member of the board of directors of the John G. Diefenbaker Memorial Foundation, member of the advisory council for the Equine Research Centre, member of the Jockey Club of Canada, member of the Canadian Thoroughbred Horse Society, and a member of the Thoroughbred Owners and Breeders Association (TOBA) of Lexington, Kentucky.